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BitTalkEp001 Transcript

BitTalkEp001 Transcript

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Published by: bittalkradio on Jun 26, 2011
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06/26/2011

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Atom:
Hi and welcome to BitTalk, a weekly podcast on news and happenings in the world of Bitcoin.I'm your host Atom..
Atlas:
.. and this is Atlas, your co-host and you may previously know me from the original Bitcoin podcast. So we're essentially a podcast all about Bitcoin, and for those who are new to Bitcoin: Bitcoinis essentially a decentralized digital currency, and it's dependent on the people and it's for the people -not by centralized organizations such as central banks or governments.
Atom:
It's basically the people's money and the reality is that we as the people have the opportunity toeither make it succeed or not, you know? So we're going to get into more details about what actuallyconstitutes Bitcoin and what actually makes up the protocol and things like that because it's a fairlycomplex topic being, you know, money. Money is a fairly complex topic we just usually don't talk about it. But anyway so we're going to get into that in an episode coming probably a week or two downthe line that'll be a primer on Bitcoin. But for the purposes of this first show we're just going to diveright into the news and start talking about the events and happenings. So uhh, stay with us! Let me justsay right up front that if you have any comments or questions you can send those into us atRadioBitTalk? BitTalkRadio?
Atlas:
BitTalkRadio at Gmail dot com.
Atom:
BitTalkRadio at Gmail dot com, okay I'll get used to that one.
Atlas:
Right on the BitTalk.tv there's a contact link you just click that right there and you can contactus on Facebook, Twitter, Email, whatever rocks your boat.
Atom:
Yes, indeed.
Atlas:
So in most recent news, Bitcoin difficulty has jumped up sky fucking high from 877,000 to1,379,000 in terms of... I don't know what those numbers exactly represent but it's network scoredifficulty, so now instead of getting say about half a Bitcoin today you're probably going to be gettingabout .10 Bitcoins a day if you're mining through your computer. So this is pretty big for thecommunity in terms of the price of Bitcoin, it's value and so forth so we might be seeing exchange ratesgoing pretty high in the next couple of weeks.
Atom:
Well it's a maturation of the market is what it is, you know I mean that's one of the things thatreally attracted me to Bitcoin initially is that you know you've got this supply that is very clearlydefined so really the only question is what is demand going to do. You know because if the supply staysthe same but demand goes up then, I mean, we know what happens there: the price goes up, it's prettysimple.
Atlas:
And the demand seems to be really high with the set community we have, about 100,000 or so -hence why we've seen so much mining, because I really doubt these people mining are just out to get aquick buck and sell it on the markets, you know? Well, maybe I'm wrong - is that how it is right now?
Atom:
You know, I think it really goes both ways: I think you've got people who are looking at thisfrom the long-term but I think there are a lot of people out there who are viewing this sort of just as atemporary phenomenon and what we're going to see is a collapse after this, but again it goes back to thefundamentals of it for me... which is that you've got this inherently finite supply and what you'retalking about is an illustration of that. You know, is that because we've had such an influx of miners andactives and you know, people expanding their operations and the move to GPU processing instead of CPU processing, basically what that's done is it's made it so that there are a lot more people competingfor those same Bitcoins, so as the difficulty goes up then you're going to start seeing them dropping outor the technology increase with it. I think this is really not so much of a problem for most people outthere, you know. You can still mine with pools but as the value goes up I mean really, what would yourather have: One Bitcoin, or rather a tenth of a Bitcoin when they're worth $17 or a whole Bitcoin whenthey're worth a dollar. The numbers make sense for me.
Atlas:
Well what brings up another concern is that all the Bitcoin supplies being hoarded within acertain niche of individuals, you know the regular people are only going to have just Bitcoins whenthey see they want to spend them online with exclusive Bitcoin retailers, and the hard-core people are
 
going to be the ones with so many Bitcoins - and since there's a finite supply, you have a lot of geeksthat are just controlling the economy and that's a concern that's brought up with a lot of people: isBitcoin truly decentralized if there's a few that own the most of the block chain?
Atom:
See now, this is another area where you and I differ: I think that it's invigorating. I think thatthat is a very exciting development and I'm actually quite new to the market, you know I just have... I'mholding 20 Bitcoins at the moment, and I have been struggling to fund for the last month or so, so thisis something that I looked at you know, maybe 6 months or 9 months back and sort of went like... "no,not really that interested" - didn't really see the point, but now that I see, now that I've read thewhitepaper on it, now that I understand how the protocol works a little bit better it really does seem tome that this is just the future of it. But I actually completely forgot what you said Atlas?
Atlas:
Uhh, I was speaking of how a few will own most of the Bitcoins in the market but you knowthere's something called the 80/20 rule, and that just means, how, the tragedy of the commons of Bitcoin, you know? I never really advocated that Bitcoin should be evenly divided among people, I'mreally not on either side I'm just stating matter-of-fact that quite a few people own a majority of the block chain, I mean I hear that like Satoshi has like 5%, 10% of the whole chain? I mean, I don't know.
Atom:
Well I mean I think that I can certainly see how there would be concerns about manipulation butthe question is what's the benefit? You know? If the market gets flooded, then that means someone...you know if someone cashes out let's say 25% of the Bitcoins in existence, you know I mean thencertainly that floods the market but it's not like that supply is indefinite - it's not like that can keephappening, so that's why we're going to get into the conversation around Mt Gox, but there's a lot of concern about a real crash. I mean, why be concerned about a crash when the value has to come fromsomewhere in order to buy all of these things.
Atlas:
Yeah, absolutely, and I mean it's a one-shot gun, you know? If someone has like a millionBitcoins , and they sell them on the market, then that's it: they can't do any more damage to theeconomy.
Atom:
Right exactly.
Atlas:
... and it just redistributes to everyone else, so if anything it actually helps the whole cause in theend, you know?
Atom:
Well, you know it always pays to play the contrarian in things like this and the the thing that I'veseen is everybody out there is trying to play the contrarian - everybody out there is saying "oh yeah,man this security breach is going to be terrible for everything and that's when I'm going to buy", and sothe fact that everybody's saying that to me says that, you know, this is the beginning and not the end.I'm very excited, but getting back to what you were saying earlier in terms of more people, in terms of a small number of people holding a large number of the curency, you know... I think that that'ssomething that will be solved once you have the marketplace start to kick in more. We've already seenit happen, you know, and you can already look at sites like Bidding Pond, Bitcoin Hop, and there are acouple of others out there that have auction sites going on. Really, I mean if you look at those auctionsites what you'll see is that there's a huge number of people trying to sell stuff - it's not a huge number of people, but relative to the amount of people who are trying to buy stuff with Bitcoins? You know themarket, I mean, people want Bitcoins and it is hard to get them. If you have to fund through one of theexchanges, trying to go through Mt Gox or something similar to that.. the only option for a lot of  people out there is to go from US dollars or whatever your local currency is to Liberty Reserve andthen transfer from that into Mt Gox and then make your purchases there (or any other exchange for thatmatter).
Atlas:
See that's where I'm kind of confused with all this, you know... I mean I haven't really gone intomerchant accounts or how banks work but why isn't there anybody that just accepts credit cardsoutright and allows them to buy their own virtual form of US Dollars on their site, and sell them back and forth. I mean, are credit cards just as bad as Paypal when it comes to chargeback requests?
Atom:
Uhh, well the deal is that most of them just won't do business - that seems to be what's
 
happening here is that companies like Paypal are adopting stances that are staunchly and blatantly anti-Bitcoin. So uhh, basically if there is any sort of question about "okay well was this transaction okay?"If someone buys Bitcoins with Paypal - I actually ran into this problem because I tried to do it, I tried to buy Bitcoins with Paypal but nobody would sell them to me, because the problem is that if you reportthat it is a bad transaction or that they scammed you or something like that then Paypal justautomatically sides on the side of the buyer. So that doesn't necessarily sound like a bad thing but thenyou look at that Bitcoins are irreversible, so once that transaction goes then if they can go, you know 10days later or even a little bit later that day and say well you know "Paypal! Paypal! They scammedme!" then Paypal doesn't even investigate it, just automatically refunds the person their Paypal and thenthey're still holding the Bitcoins so it makes it super-easy to scam and basically destroyed that as avenue to do it. So really what we're seeing here is very aggressive policy moves by some of the payment sites, and I believe Mastercard did it too.
Atlas:
I see, well you see that reminds me that Wikileaks recently called that Bitcoin itself will not bethe future of online marketing, they say that Bitcoin will act itself as like the gold of the all-digitalcurrencies and digital transactions - what they wanna see is a sub-currency of Bitcoin to just work for regular people like Mom and Pop so they can do transactions on the web, and they say oh, they didn'tlike the product or whatever they can just reverse the transaction. I guess they have a good point there,I guess there is sometimes a call for reversible transactions, but not when it comes to the first line of value.
Atom:
I think Wikileaks has all hat, no cowboy... that's what I think about them, they've been talking areally big talk for quite some time and they've really released very little. I mean, we were supposed tosee lots of documentation on... Adrian Assange said that they had a series of bomb shells on Bank of America and never actually ended up releasing anything at all. So I mean, I think that you're going tosee lots of people calling for central control of this, I think that's going to be the move because reallythat's the only way that it can be co-opted. If you have a new currency that's derived off of this that hasthe ability to be centrally controlled - which Bitcoin essentially doesn't outside of the entire network colluding to accomplish that - then you know, but I mean I think that's it's key selling point frankly.
Atlas:
You see once you get Bitcoin centrally controlled, it's not Bitcoin anymore.
Atom:
Right, exactly, so if you're going to do that then why not have anything else.
Atlas:
And since it's open source software you can just see some people make another chain, you knowI think we really have reached a singularity here. I think there's no turning back: people are going towant decentralized money, they're going to realize this is the best form of money and where to keeptheir wealth and labor in, and there's just no stopping it - even if the government were to take down thecurrent Bitcoin right now, something else is just going to show up.
Atom:
Right.
Atlas:
You know? It's decentralized all the way down.
Atom:
Right, exactly. I mean you can fight progress certainly, but eventually... eventuallyunsustainable systems no longer function, and that's really where I think we are now. That's whyBitcoin and so many other currencies are so attractive, you know not even currencies I'm talking aboutcommodities, I'm talking about silver, you know various other things. For God's sake I stocked up ongrain six months ago, and I'm glad that I did because we use it and frankly it's a lot more expensivenow than it was then. So I think that that's the key driving factor here is that fiat currencies, which arethe standard currencies across the world, are just fundamentally not safe to have your money in as aninvididual. If you want to retain your purchasing power, if you wanna still have the same amount of money that you did today in a week or two weeks, then the only way you can do that is by getting intosomething that isn't constantly being printed to pay for someone else's debts.
Atlas:
Well you see the liberals are still stuck on fiat currencies though because they still want to seethe government be able to inflate the currency because just based on... they haven't seen the contraryreally, we haven't had a standard, set, non-inflationary currency in our society, so they claim that a non-

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